The Affordable Care Act: Cost goes up for young adults, down for seniors State Rep. says

Written by John Szozda

May 04, 2012

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If the Affordable Health Care law survives the Supreme Court, seniors could see their health insurance costs go down while their children’s costs go up.

Republican Barbara Sears, assistant majority floor leader for the Ohio House of Representatives, shared that insight with members of the Eastern Maumee Bay Chamber of Commerce when she spoke to them recently at ProMedica Bay Park Hospital.

Sears serves on three health care related committees: insurance, health and aging and finance and appropriations. She also co-owns a firm specializing in employee benefits. The chamber invited her to share her expertise on how the ACA will impact Ohioans between now and 2017 when it takes full effect.

Sears shared a number of concerns, the first being how the law will affect the premiums of young healthy adults. A young male, currently paying $70 to $90 monthly for a basic individual policy, will pay an estimated $250 to $260. At the same time, a 60-year-old with significant health problems may see his premium decrease significantly, according to the Milliman Report, she said. The Ohio Department of Insurance hired Milliman, an actuarial consulting firm, to determine how the ACA will impact individual and small group health insurance.

Rates for young women are also expected to increase dramatically because maternity benefits are mandated. Sears says her company just quoted a Health Savings Account plan for a 38-year-old married woman with one child. The premium was $471 a month plus $710 for maternity benefits which can’t be used for 270 days.

“You might as well have a Christmas club account as opposed to buying a maternity coverage plan. The new plans are going to be mandated to have that (maternity benefits)… It’s going to make it unaffordable. They are going to stay on Mom and Dad’s insurance until they’re 26 or 28. Then, they’re going to go to COBRA…It’s going to be more advantageous for them to not get married…That’s the way they’re going to get that maternity and childbirth covered...So they’re going to find the guy of their dreams, move in with the guy of their dreams while staying on Mommy and Daddy’s policy. They’re going to have their children. They’re going to on COBRA because now they can take the man of their dreams, put them on COBRA and stay on Mom and Dad’s policy for three more years because they are aging out, so now we have a 31-year-old on Mommy and Daddy’s policy in the State of Ohio.”

Sears says another concern is that it will be cheaper for some employers to pay the penalty than to provide insurance for their employees. This will move 390,000 from group plans to individual plans, she says. “This is the pathway to a single-payer system. Business will be better off to pay the penalty.”

Another concern is that government will subsidize those who buy an individual policy through the state exchange. Those eligible will be determined by a sliding scale based on up to 400 percent of poverty, or a $90,000 income for a family of four. These subsidies will cost taxpayers billions each year.

Some employers may find it in their employee’s interest to drop coverage, increase wages and send the employee to the exchange for a subsidize plan. To discourage that, subsidies will be available for small business to help them maintain coverage. However, these will be phased out after a few years. Sears says, “It’s just lousy policy because it ratchets up all of these benefits with this false idea of what the real cost is and gets everybody comfortable and used to accepting all of this richness, then it says, ‘Welcome to the real world, here’s your bill.’”

Sears is also concerned that one million Ohioans will be added to the Medicaid system. The state will have to pick up this additional cost and, because it has to balance its budget by law, funds for education and corrections will be reduced.

Not everyone agrees with the Milliman report. The Ohio Consumers for Health Coverage, a coalition of non-profit groups including AARP Ohio and the Ohio Federation of Teachers, issued a response to the report. It states that the Congressional Budget Office shows premiums for individual insurance would increase 10 to13 percent, not the 55 to 80 percent quoted in the Milliman report.

The response cites a Kaiser Family Foundation analysis that shows the projected monthly premium for a single person with $25,000 income will be about $282. That’s in line with Milliman projections. However, the government subsidy would reduce that to about $144. How long subsidies will be in effect and what sliding scale will be used if they are eliminated is undetermined.

While we await the Supreme Court decision on the constitutionality of the ACA, the debate will continue. Sears ended her talk to the chamber with some sobering issues for us as a society. “Fixing the health care system in the United States would be very simple. We would do much like other countries do. We have to decide when enough is enough. How long do we work on Mom and Grandma? How long do we work on that wonderful little infant child until we say God has a different design for that person? And, how convenient is convenient? How long are you willing to wait for that MRI? How long are you willing to wait for that surgery? How long are you willing to wait to see the doctor? At what age do you not get a pacemaker? A hip replacement? At what age do you not go on dialysis?

“Those are the arguments that countries that have socialized medicine grapple with. We don’t wait for a hamburger for 30 seconds without getting annoyed about it…We demand the very best healthcare that we can get. We want it now. We want the appointment yesterday. We want it within a mile from our house.”